Does IB make you a better investor?
Title. Am curious to hear the communities views on whether being in IB makes you a better investor for the stock market. I feel like there wouldn’t be much correlation considering the majority of what you do is execution work, but you also get unparalleled exposure to the market in whatever industry you work in.
I worked a corp dev internship last summer and my asso was ex Goldman and he was a fucking genius. Dude knew his shit about the markets and very often got it right on how they would move during earnings season. I’m curious to know whether he was a special case of if IB really develops your skills as an investor.
Public equities? No, but it puts you closer to seasoned investors that can teach you
Private equity sure, IB trains you to identify good / marketable business characteristics, though you develop the critical diligence lens yourself
Have you met an IB analysts?
Only one I’ve talked to extensively was the one I mentioned in the post who was a former Goldman analyst. Everyone else is college seniors that have done a summer in IB but nothing more
Depends who you are comparing them to.
Compared to an average person: most likely. Compared to avg person in finance (outside front office / investing roles): still most likely. Compared to someone in PE/HF: maybe but leaning toward a no because that person will most likely already have investing (could be specifically in public/private market or certain industry) experience under their belt.
So for ur corp dev example, if he happens to be the only IB person there then, on average, he probably is a better investor in that office.
Not directly. It's kinda like whether hitting the gym would make you a better basketball player. Yes it does help, but doing it too much (staying past VP) will eventually be a hinderance because the correlation isnt 1 to 1
No
If it did, we wouldn't see the large hedge funds trying to move away from hiring out of IB
Echoing comments above saying no. What likely is the case with your Goldman colleague is that he is just really passionate about public markets to the extent that he would leave private markets to pursue it, which naturally means he innately has better aptitude for it. Most people from IB wouldn't excel like this guy on average, probably far from it
(1) "Does IB make you a better investor?"
Not in and of itself. IB teaches a very specific set of skills. These skills don't impact whether or not you are a good investor. IB can help you become a better investor. IB can help you become an idiot of an investor. It is so dependent on specific individual experience that one can't really generalize.
(2) "I worked a corp dev internship last summer and my asso was ex Goldman and he was a fucking genius."
What you see as genius is most likely just what being more experienced looks like
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